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10/01/2013
Watchdog Highlights Defence Project Delays And Overspending
Huge defence projects are being hit by delays and overspend despite government promises to control costs, according to a report today by the National Audit Office.
In respect of its largest defence projects there are early signs that the Ministry of Defence has begun to make realistic trade-offs between cost, time, technical requirements and the amount of equipment to be purchased.
The uncertainties these introduce reduce the MOD’s ability to plan and manage the defence budget effectively, the report noted.
The document, which gives a progress review of the 16 largest defence projects, shows that in the last year there has been a total forecast slippage of 139 months and increase in costs of £468 million.
This means that, since the projects were approved, costs have increased by £6.6 billion (around 12 per cent more than the planned cost) and the projects have been delayed by 468 months, taking almost a third longer than originally expected.
The MOD is accepting the capability risk and some wider costs resulting from these project delays and is having to make difficult decisions about long-term capabilities. For example, the version of the Falcon communications system being developed for use in Afghanistan, at a cost of £32 million, will now not be deployed to theatre. This is partly owing to development delays and it means that there will need to be reliance on legacy systems for a longer period.
Amyas Morse, head of the National Audit Office, said today: "The Ministry of Defence faces a difficult task striking a balance between delivering the capabilities it wants and those it can afford. There will always be factors over which the Department has limited control, but it must do more to learn from previous projects.
"The continuing problems highlighted in my report show that, if it is to make the most of the money available, the Department has more to do to address its longstanding issues on project performance."
(GK)
In respect of its largest defence projects there are early signs that the Ministry of Defence has begun to make realistic trade-offs between cost, time, technical requirements and the amount of equipment to be purchased.
The uncertainties these introduce reduce the MOD’s ability to plan and manage the defence budget effectively, the report noted.
The document, which gives a progress review of the 16 largest defence projects, shows that in the last year there has been a total forecast slippage of 139 months and increase in costs of £468 million.
This means that, since the projects were approved, costs have increased by £6.6 billion (around 12 per cent more than the planned cost) and the projects have been delayed by 468 months, taking almost a third longer than originally expected.
The MOD is accepting the capability risk and some wider costs resulting from these project delays and is having to make difficult decisions about long-term capabilities. For example, the version of the Falcon communications system being developed for use in Afghanistan, at a cost of £32 million, will now not be deployed to theatre. This is partly owing to development delays and it means that there will need to be reliance on legacy systems for a longer period.
Amyas Morse, head of the National Audit Office, said today: "The Ministry of Defence faces a difficult task striking a balance between delivering the capabilities it wants and those it can afford. There will always be factors over which the Department has limited control, but it must do more to learn from previous projects.
"The continuing problems highlighted in my report show that, if it is to make the most of the money available, the Department has more to do to address its longstanding issues on project performance."
(GK)
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